Jon Stewart: Inflation

I was just watching "The Problem With Jon Stewart", which dedicates half an hour of prime time television to the inflation problem. He interviews former treasury secretary Larry Summers. Neither of them mention the USA national debt, which is weird, because this debt, the inflation and interest rates are obviously connected.

During the interview the audience is laughing at Summers, because he argues that workers should bear the cost of this inflation, which Jon doesn't think is fair.

But they don't go into the other issue underpinning this inflation and the interest rates. Currently interest rates are so low, and their debt is so high, that they would not be able to afford a bump in interest rates, because they are already borrowing money to pay for the interest on their debt.

The USA have this yearly ritual where they ask themselves "should we reraise the debt ceiling?'. It's a quiet ritual, with very little media attention. The answer is always, oh yes, we should.

And they can, but at some point they will lose their triple A status and when borrowing becomes too expensive to pay for the interest on this debt, couldn't the system simply collapse?

Why are Jon Stewart and Larry Summers not mentioning this obvious elephant in the room?

en.wikipedia.org/wiki/National_debt_of_the_United_States

It's real, if they raise interest rates it wouldn't stop inflation it will just wreck the economy.

USA debt ceiling:

I feel like the elephant in the room is the question of the missing value where workers productivity has greatly increased due to technology while their wages stagnate. I guess USA has collectively decided that corporations get all of that benefit because of capitalism reasons, and everyone's OK with it?

But really I feel like the even bigger elephant in the room is the USA campaign finance laws. In plain talk, this is legalized bribery of politicians by corporations.

@chessfan124 said in #5:
> But really I feel like the even bigger elephant in the room is the USA campaign finance laws. In plain talk, this is legalized bribery of politicians by corporations.

Maybe you should use the sentence " The Platybelodon in the room"?

Sadly, useful idiots unlike Platyrbelodons are not extinct.

Please keep in mind that, while my economic stances are pretty well known here at this point, none of the below are opinions.

And if polylogarithmique downvotes me, so help me God, I WILL hire a rogue moderator to superchatban him. I don't know what that would entail, but I'm sure it would be crippling.

@chessfan124 said in No. 3:
I feel like the elephant in the room is the question of the missing value where workers productivity has greatly increased due to technology while their wages stagnate.

fred.stlouisfed.org/series/CES0500000003#0
Wages are increasing at an increasing rate.

> I guess USA has collectively decided that corporations get all of that benefit because of capitalism reasons, and everyone's OK with it?

This is a bit of semantics, but whenever you start throwing around terms like "collectively decided", you're no longer technically discussing capitalism (unless you're Noam Chomsky*).

*Actually, I'd like to see how Chomsky would respond to capitalism being made by a collective.

Inflation easily predictable 3 years ago, basic laws of economics.
Shutdowns have Costs, while no production, contributes to inflation. Less supply because of shutdowns.
Free government money, stimulus/no rent evictions etc increases the supply of money.
As does government borrowing.
So you have fewer goods or supply, being chased by an inflated money demand. Supply/Demand Inflation.
No one can beat the basic laws of economics, can't be done. You can only make things as efficient as possible, using proper models/logic.
Another problem with government borrowing is corruption. Corruption will kill any system, no matter how good.
Unfortunately the love of money drives corruption.
However, no one can beat the basic laws of economics, they are math relationships.
No Free Lunch, someone offers you a free lunch, you are the catch/product.

@clousems said in #7:
> Wages are increasing at an increasing rate.
>
> This is a bit of semantics, but whenever you start throwing around terms like "collectively decided", you're no longer technically discussing capitalism (unless you're Noam Chomsky*).
>
> *Actually, I'd like to see how Chomsky would respond to capitalism being made by a collective.

If we go with semantics maybe we should add this:

> Labor’s share of income declines when wages grow more slowly than productivity, or the amount of output per hour of work. The result is that a growing fraction of productivity gains has been going to capital. And since capital tends to be concentrated in the upper ends of the income distribution, falling labor income shares are likely to raise income inequality.

Source IMF

I'm now very curious about a debate between Clousems and Poly ^.^, but that aside, I think the short answer is that its still a manageable problem with interest payments only at about 10% of US revenue. That is still significant IMO but apparently its been roughly around 8% since 2007 (about 15 years now)

I found an article that goes into some depth on when the interest payments start to become a real problem, and generally speaking its projected to be somewhere in the late 2040s IF the following trends continue, which is a huge if in my opinion.

www.pgpf.org/analysis/2023/02/higher-interest-rates-will-raise-interest-costs-on-the-national-debt

Most of the national debt that has been accrued has happened because of the last few presidents (the war in Afghanistan, Covid, the energy bill...), though the bulk of it was due to Covid-19 I think. So I don't see continued deficit spending being something that either party has much appetite or reason to engage in going forward, unless there is some other emergency that comes along. And just to be clear, Ukraine is not costing the US a sizeable amount of money, not compared to their overall budget.